Rio Tinto to calm fears over Alcan buy

Rio Tinto in bid to calm fears over Alcan buy London-listed mining giant Rio Tinto today sought to ease market worries about whether the credit crisis would force it to pull its $38.1bn (£15.6bn) deal to buy Canadian aluminium company Alcan. The deal is being debt-funded, and questions were raised over the squeeze in credit in the wake of the US mortgage crisis. There were concerns that debt costs could rise sharply, making the deal the latest in a line to fall foul of the current turbulence, but Rio shrugged off the fears. 'We don't have any worries at all,' said Rio Tinto spokesman Nick Cobban. He added that the debt used to finance the deal is committed bank financing, underwritten by Royal Bank of Scotland, Deutsche Bank, Credit Suisse and Société Générale, which have been selling the debt in the market. Rio trumped a hostile bid by US rival Alcoa to win the Alcan deal. 'From where we are, we have no concerns about Rio Tinto's ability to finance the transaction,' said Alcan's investor relations vice-president, Ulf Quellmann.